Products March 16, 2023

Investment Product and Service Launches

Mirae Asset Mutual Fund launches Smart Beta ETF; Brown Advisory introduces Sustainable Value Mutual Fund; Modern Capital releases Capital Tactical Opportunities Fund; and more.

Reported by

Mirae Asset Mutual Fund Launches Smart Beta ETF

The Mirae Asset Financial Group announced the launch of the Mirae Asset Nifty 100 Low Volatility 30 ETF. The product is a smart beta ETF that aims to measure the performance of the securities in the large market capitalization segment.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Key Highlights of Nifty 100 Low Volatility 30 Index ETF include:

  • In the short term, it can be used as an investment during bear markets/choppy markets;
  • In the long term, it can used for investment, as the product has generated higher risk-adjusted returns over a longer horizon;
  • It has relatively lower drawdown compared to a broad market; and
  • It provides alternate sectorial exposure, which is different from the Nifty 100 Index.

“Smart beta strategies typically capture factor exposures using systematic, rules-based approaches cost-effectively,” Mirae Asset’s head of ETF products, Siddharth Srivastava, said in a statement. “[The] Nifty 100 Low Volatility 30 Index aims to generate better risk-adjusted return over a longer horizon and provides alternate sectorial exposure. This fund may be used by investors who are cautious about portfolio volatility and downside risk and are keen to generate long-term wealth with relatively lower risk.”


Brown Advisory Launches Sustainable Value Mutual Fund

Brown Advisory announced the launch of the Brown Advisory Sustainable Value Fund.

The fund invests in large-market capitalization companies with durable fundamentals and capital discipline that are deemed undervalued by the portfolio manager. The companies should satisfy the fund’s environmental, social and governance criteria.

The fund will be managed by Michael Poggi, who joined Brown Advisory as an equity analyst in 2003. During his tenure, he has covered a range of sectors, with a focus on value investment opportunities.

“The Sustainable Value Fund is unique because it combines Brown Advisory’s expertise in sustainable research with our years of experience in large cap and value investing,” said Poggi in a statement. “We believe that this approach allows us to uncover undervalued companies that others may overlook. We believe that the result of integrating our fundamental research with an ESG lens, utilizing our extensive and diverse team of analysts, will drive our ability to deliver returns for our investors.”

Modern Capital Announces Capital Tactical Opportunities Fund

Modern Capital Inc. announced that the Modern Capital Tactical Opportunities Fund is available to investment advisers who have custody of client accounts at Charles Schwab.

“Our goal is to be on all the major RIA platforms that investment advisors utilize daily. Charles Schwab is a game-changer for our firm, and we are eager to get to work,” said Michael Pierce, head of institutional distribution at Modern Capital, in a statement.

The fund seeks to provide income and capital gains by investing a significant portion of the portfolio in closed-end funds, exchange-traded funds and sponsored American depositary receipts. Unlike funds with a narrow mandate restricting portfolio managers’ ability to react to fluid market conditions, MCTDX allows for greater discretion.

 

First Trust Launches First Trust Bloomberg Inflation Sensitive Equity ETF

First Trust Advisors LP announced it has launched a new exchange-traded fund, the First Trust Bloomberg Inflation Sensitive Equity ETF.

The fund looks for investment results that correspond generally to the price and yield of the Bloomberg Inflation Sensitive Equity Index.

The FTIF aims to combat inflation by investing in companies in the energy, materials and real estate sectors. These companies generate high free cash flow and have shown historically strong performance during inflationary cycles.

“We believe that high inflation is one of the most important challenges that investors are facing in 2023,” said Ryan Issakainen, a senior vice president and ETF strategist at First Trust, in a statement. “High quality stocks from sectors that have historically benefitted from rising prices may help investors navigate this environment.”

J.P. Morgan Asset Management Launches JPMorgan Active China ETF

J.P. Morgan Asset Management announced the launch of the JPMorgan Active China ETF. The fund is designed to provide a “best ideas” portfolio of Chinese equities, focusing on an investment process driven by bottom-up stock selection.

Managed by JPMorgan Asset Management (Asia Pacific) Ltd., the fund leverages the Greater China research team within J.P. Morgan’s emerging markets and Asia Pacific Equities team.

“The launch of JPMorgan Active China ETF is another example of our commitment to delivering innovative and differentiated investment solutions to clients,” said Bryon Lake, global head of ETF solutions at J.P. Morgan Asset Management. “There are a lot of opportunities in China that investors want to invest in with intentionality, and we are excited to offer them a strategic option to capitalize on.”

Data and Research March 16, 2023

Government Employees Express Fear of Outliving Retirement Income

Personal debt, possible cuts to Social Security and rising inflation are concerns for state and local government employees when saving for retirement.

Reported by

While many government workers say their jobs’ retirement benefits are what attracted them to the position in the first place, a majority of these workers are also not confident that they are on the right track to financial security in retirement, according to new research published by MissionSquare Research Institute.

MissionSquare’s survey of 1,003 state and local government employees between October and November 2022 found that only 28% of that group are confident they will be able to retire when they want to, and only 23% are confident they will not outlive their savings.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

At the same time, 86% of the survey respondents cited retirement benefits as either major or minor factors that attracted them to their current public sector job in the first place. Factors like job security and personal satisfaction also ranked highly.

Barriers to Saving for Retirement

Rivka Liss-Levinson, one of the authors of the report and a senior research manager at MissionSquare, says rising inflation and concerns about personal debt are driving a lot of the financial anxiety that public employees are experiencing.

According to the report, one in three respondents said they have a hard time paying their monthly bills on time and in full. In addition, 87% of respondents said they have one or more types of debt, and 77% of these employees said their level of debt prevents them from saving more for retirement.

“We saw very low levels of financial security … and that’s something that really can have an impact on state and local government workers, not just in terms of their financial security, but [in] how they’re able to perform at work,” Liss-Levinson says. “If they’re focused on their finances and worrying whether or not they can pay their car loan, it’s going to be a lot harder for them to provide important services.”

The most common types of debt for government employees, according to the survey, include credit card debt (61%), mortgage debt (46%), car loans (45%), student loans (26%) and medical expenses (22%).

State and local government workers reported saving for many other purposes besides retirement. The majority (58%) said they are saving in an emergency fund, whereas others reported saving for a vacation, travel or home improvements.

Joshua Franzel, managing director at MissionSquare, says these kinds of short-term goals often interfere with how much employees will save in the long-term.

MissionSquare also found that more than half (56%) of the government employees surveyed reported they are participating in a defined benefit plan through their employer, and slightly fewer (48%) are participating in a defined contribution plan. Among those participating in a defined benefit plan, 76% are fully vested, based upon their years of employment.

But outside of workers’ employer retirement plans, the potential for cuts to Social Security are a major concern, as 63% of respondents said they plan to use Social Security benefits as income in retirement.

Meanwhile, more than half of the respondents said they are worried about the government making significant cuts to Social Security before they retire. The Congressional Budget Office reported in December 2022 that it predicts trust funds used to pay for Social Security will be depleted by 2033, resulting in a 23% cut in planned benefit payments in 2034.

But Franzel also points out that there is a sizable minority of public sector workers who do not participate in Social Security. The survey found that 35% of respondents are planning to use savings from an individual IRA to supplement income in retirement.

Struggle to Retain Workers

Despite relatively positive levels of morale, 59% of respondents said they are considering leaving their jobs voluntarily for either or both of the following reasons: to change jobs, to retire or to leave the workforce entirely for the foreseeable future.

Common demographic characteristics of those considering changing jobs include people less than 40 years old, unmarried, earning a household income of less than $50,000 per year, college-educated, of Hispanic descent, not financially secure and people struggling with debt.

Liss-Levinson notes that many employees are feeling burned out and stressed due to colleagues leaving their jobs during the pandemic. These employees are often forced to take on an additional workload at their jobs, which may lower their morale and motivate them to leave.

When asked what their employers should do to help with employee retention, respondents were most likely to recommend improving salaries (74%) and increasing bonuses (54%).

Liss-Levinson says she is particularly struck by the finding that 45% of respondents said showing more appreciation and recognition for employees and they work they do was among the top recommendations for employers to help retain more people.

“[This is] a way that employers can help [with retention] without some of the red tape that you might have to go through to change compensation structures,” Liss-Levinson says.

This MissionSquare research was conducted in a national online survey in conjunction with Greenwald Research. The final data was weighted by gender, age, income and industry type to reflect the distribution of the state and local government workforce as found in the U.S. Census Bureau’s Current Population Survey and the U.S. Census of Governments.

 

«